Looking for a new way to generate revenue now or in the future? Launching a retail product line is a great way to do it — and it's possible at any scale.
At the 2020 Main Street Strong Restaurant Conference, industry insiders — including chefs, restaurateurs, marketers and policy experts — shared their insights and discussed adapting to the current industry landscape.
Many of the experts talked about expanding into retail products, and while this may sound ambitious for many small business owners, the great thing about retail is that it's doable across a range of budgets. It can be as simple as adding produce, groceries, or pantry staples to your menu so your restaurant becomes more of a "one-stop shop" for your customers, or as enterprising as launching a branded product line your customers can purchase at the grocery store.
In this blog post, we'll highlight a number of different ways to expand into retail, with examples from real restaurants.
First and foremost, expanding into retail is a great way to generate a new revenue stream. This revenue stream may simply serve as a temporary complement to your restaurant business, or it could become its own separate and distinct business over time.
Retail products have other benefits, too. If they meet a previously unmet need, they're likely to build loyalty among your existing customers and attract new customers. Certain retail products — like clothing, accessories, or other promotional items — also function as free advertising for your business.
What types of retail are there?
Here are some of the most popular ways to venture into the retail space:
Consumables. Special sauces, spice blends, or other items you're known for packaged for people to use at home.
Apparel, Accessories & Specialty Items. T-shirts, caps, or specialty items (think wine openers, utensils, dish towels, etc.) featuring your logo or an image or phrase customers associate with your restaurant.
Pantry Staples. From produce to dried goods to hand sanitizer, pantry staples are a low-cost way to increase sales and provide your customers with basic items they need.
Meal Kits. Fully- or partially-prepared meals for 2-6 people are a great way to offer families some variety (and simplicity) in the kitchen.
How to get started with restaurant retail
1. Figure out what your customers want and need.
Expanding is a great idea — as long as your customers want what you're selling. Have you had diners ask how they can create specific sauces or menu items at home? Or maybe customers inquired about branded merchandise? Are people complaining about long lines, low stock, or limited delivery from grocery stores in your area?
At the Main Street Strong Restaurant Conference, Chef Stephanie Izard said that her foray into retail started with customers at Girl & The Goat asking how to make her famous green beans at home.
"It's a fish sauce vinaigrette that's tasty on everything! So we decided to put that in a bottle. And then we were like, 'Oh, that other sauce is pretty tasty too… we should put that in a bottle.'"
Stephanie Izard, Chef/Owner Girl & the Goat
They found a food scientist and figured out how to do packaging, and pretty soon, they were selling the sauces out of their restaurants.
Don't worry — you don't need a food scientist to get into retail! Chen-Chen Huo, co-founder of San Francisco's MAC'D, shares advice for restaurant owners and operators:
"Think of different ways to package your offerings, whether it's branded cocktail kits or build-your-own pasta. Guests can bring your experience home or stock their pantry. It's about thinking of new ways to add value to customers who are experiencing cooking fatigue after months of being at home."
Chen-Chen Huo, CEO of A La Couch / MAC'D
If you're not sure what your customers are looking for and what they'd be interested in buying, ask them! You can talk to a few loyal regulars next time they pick up an order, or you can use social media to ask your followers (try an Instagram poll or Facebook post).
2. Decide what's the best fit for your business.
Are you aiming to venture into retail on a small scale, or is this something you want to pursue aggressively?
When it comes to retail, there are plenty of "low-lift ways that don't require a complete overhaul," noted Kofi Amoo-Gottfried, VP of Marketing at DoorDash, at the Main Street Strong Restaurant Conference. He shared ideas from multiple restaurants like:
DIY meal kits (including family kits geared toward kids)
Fresh produce boxes
Pantry items and groceries that may be sold out elsewhere (think: salt, flour, sugar, canned goods, toilet paper, hand sanitizer)
Partnering with other local businesses to sell items that people might find in your restaurant but aren't normally available for purchase — like plants, flowers, decor, books, etc.
Special consumables or branded merchandise are also great retail options, though they require more of an investment. Decide which route makes the most sense for your business in the immediate term and pursue that avenue first.
3. Do some research.
Whether you're selling pantry staples or interested in launching a nationally available line of spice blends, you'll need to do some research. Be sure to find out:
Local and federal labeling guidelines for packaged goods
Whether retail items are taxed differently than prepared food in your state
How your existing suppliers can provide the additional materials you need — they might need the extra business, too!
Prices for similar items at traditional grocery stores or online retailers
4. Decide where to sell retail.
There is also the option of selling your products via grocery stores, but this is more of a long-term venture. When Stephanie Izard wanted to grow her retail brand and make it more widely available, she realized retail was "very different" from restaurant operations — so she eventually hired a team of packaged goods experts, who connected her with the brokers that helped get the products into grocery stores. She also works with special product-focused marketers to ensure shoppers are aware of the items and know where to buy them.
5. Let your customers know.
Most importantly, don't forget to promote your retail offerings. Your customers may not always notice a new addition to your online menu or in-store offerings, so be sure to use all of your marketing channels — including social media, email, and signage — to advertise your new offerings and let people know where they can buy them.
As Kofi said at Main Street Strong, "The foundation of great marketing is getting an understanding of what people need and then figuring out [how to] meet those needs."
Which retail strategy is a good fit for your business?
Once you've figured out what type of retail products you want to offer, DoorDash can help you get them to your customers! Sign up for DashMart — our new convenience store platform — to get your products into customers' hands.
Check out our suite of products to get started.